Bankruptcy Discharged. How will short sale, foreclosure, or DIL affect credit report?

[cw99]

We filed for CH7 in PA 10/10 and were discharged in 2/11. We did not reaffirm mortgage or car loans. Wells Fargo agreed to a loan modification in 5/11. We have been made all payments to mortgage and car loans on time (before and since BK). My husband and I are now beginning divorce proceedings and I am trying to figure out the best way to dispense with the house. He would like to keep the house but I cannot be tied to the mortgage/title (though it was IIB) once the marriage is dissolved. My credit score is already back to 678 (18 mths post BK) and I would really prefer to not have anything additionally negative reported. I have received conflicting information on the following and wondering if someone could shed some light on it:

1) Since the mortgage loan was IIB and on the credit reports says $0 owed, is there a way for me to be removed from the title and deed and allow him to be the sole responsible party in regards to making payments to Wells Fargo if he wishes to "ride through" the remainder of the mortgage? Wells Fargo is not reporting any payment to the credit agencies and said that they would not because we did not reaffirm. They are saying that the loan modification does not reaffirm the mortgage.

2) We need to push $335,000 on the sale of the house to break even with satisfying the loan and realtor costs. The real estate agent I spoke with seemed to think that might be the exact price we can get for the house. Because of the BK date, he can't apply for a mortgage to refinance it on his own..and he couldn't afford it without the modification terms/rates that we were given. If we short sell it, allow it to foreclose, or do a deed in lieu of foreclosure, what would the ramifications be to my credit for each? My BK attorney seemed to think (but wasn't actually sure) that even if they made a notation on the public section, that we should be able to argue that it was IIB and could not be listed again. Other things that I have read made it seem like they are different circumstances and therefore it could be listed and my credit could be affected again or that it's up to the individual credit agencies and how they want to handle it. What is my best scenario outside of selling the house to break even?

[drowning123]

Sell your half to your soon-to-be ex-husband for $1, if you want to walk away badly. Consult with a real estate attorney.

[justbroke]

While I do believe that QC'ing it to the husband for $1 will remove you from the title, it won't remove you from the Mortgage/Note. You would still be listed on the mortgage/note even though you have no liability for it. The best thing to do is, as part of the decree, force the ex-spouse to refinance or sell. (Yes, that sounds simple, but this is where most post-dissolution issues arise! The spouse that receives the property never refinances!)

From what I personally know and from what I have read here, those who were foreclosed-upon after filing, did not have any additional credit reporting or judgment reporting noted in their credit report. That does not mean that a lender may still report it. The consensus is that it should not be reported, but the real question is... would they have violated the automatic stay if they did? Methinks so.